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Land Improvements Under Land Tenure Insecurity: The Case of Liming in Finland

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  • Myyra, Sami
  • Pietola, Kyosti

Abstract

This article solves and characterizes optimal decision rules to invest in irreversible land improvements conditional on land tenure insecurity. Economic model is a normative dynamic programming model with known parameters for the one period returns and transition equations. The optimal decision rules for liming are solved numerically, conditional on alternative scenarios on the likelihood that the lease contract and, thus, farmer access to land is either renewed or expired. The model parameters represent Finnish soil quality and production conditions. The results suggest that irreversible liming decreases quickly and the yields decline gradually, when the farmer is confronted with land tenure insecurity caused by uncertain renewal of the lease contract. The results are confirmed via empirical results.

Suggested Citation

  • Myyra, Sami & Pietola, Kyosti, 2005. "Land Improvements Under Land Tenure Insecurity: The Case of Liming in Finland," 94th Seminar, April 9-10, 2005, Ashford, UK 24418, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae94:24418
    DOI: 10.22004/ag.econ.24418
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    2. Stein Holden & Hailu Yohannes, 2002. "Land Redistribution, Tenure Insecurity, and Intensity of Production: A Study of Farm Households in Southern Ethiopia," Land Economics, University of Wisconsin Press, vol. 78(4), pages 573-590.
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    Cited by:

    1. Lankoski, Jussi, 2013. "Counterfactual approach for assessing agri-environmental policy: The case of the Finnish water protection policy," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 94(2).
    2. Potthoff, Kerstin & Dramstad, Wenche E., 2023. "Management of rented farmland in Norway: Factors impacting on tenants’ decisions to make investments," Land Use Policy, Elsevier, vol. 135(C).
    3. Lyu, Kaiyu & Chen, Kevin & Zhang, Huaizhi, 2019. "Relationship between land tenure and soil quality: Evidence from China’s soil fertility analysis," Land Use Policy, Elsevier, vol. 80(C), pages 345-361.
    4. Zhang, Hongliang & Mu, Jianhong E. & McCarl, Bruce A., 2018. "Adaptation to climate change via adjustment in land leasing: Evidence from dryland wheat farms in the U.S. Pacific Northwest," Land Use Policy, Elsevier, vol. 79(C), pages 424-432.
    5. Purola, Tuomo & Lehtonen, Heikki, 2020. "Evaluating profitability of soil-renovation investments under crop rotation constraints in Finland," Agricultural Systems, Elsevier, vol. 180(C).
    6. Leonhardt, Heidi & Penker, Marianne & Salhofer, Klaus, 2019. "Do farmers care about rented land? A multi-method study on land tenure and soil conservation," Land Use Policy, Elsevier, vol. 82(C), pages 228-239.
    7. Christine Léger Léger-Bosch, 2019. "Farmland tenure and transaction costs: Public and collectively owned land vs conventional coordination mechanisms in France [Régime de tenure foncière et coûts de transaction: terres publiques et c," Post-Print hal-02573765, HAL.
    8. Thanyaporn Chankrajang, 2015. "Partial Land Rights and Agricultural Outcomes: Evidence from Thailand," Land Economics, University of Wisconsin Press, vol. 91(1), pages 126-148.
    9. Liu, Xing & Lehtonen, Heikki & Purola, Tuomo & Pavlova, Yulia & Rötter, Reimund & Palosuo, Taru, 2016. "Dynamic economic modelling of crop rotations with farm management practices under future pest pressure," Agricultural Systems, Elsevier, vol. 144(C), pages 65-76.
    10. Adewale Henry Adenuga & Claire Jack & Ronan McCarry, 2021. "The Case for Long-Term Land Leasing: A Review of the Empirical Literature," Land, MDPI, vol. 10(3), pages 1-21, March.
    11. Purola, Tuomo & Lehtonen, Heikki & Liu, Xing & Tao, Fulu & Palosuo, Taru, 2018. "Production of cereals in northern marginal areas: An integrated assessment of climate change impacts at the farm level," Agricultural Systems, Elsevier, vol. 162(C), pages 191-204.
    12. Leonhardt, Heidi, 2017. "Tenancy and Soil Conservation in Austria: Analysing the Crop Choice of Farmers," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 262006, German Association of Agricultural Economists (GEWISOLA).
    13. Muawanah, Umi, 2015. "Does Land Conflict Matter to Farm Productivity? A Case Study of Cambodia," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 15(2), December.
    14. Kyösti Pietola & Sami Myyrä & Eija Pouta, 2011. "The Effects of Changes in Capital Gains Taxes on Land Sales: Empirical Evidence from Finland," Land Economics, University of Wisconsin Press, vol. 87(4), pages 582-594.

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